China-based local services platform Meituan-Dianping has entered discussions with investors including internet group Tencent concerning a round sized between $3bn and $5bn, Reuters reported today, citing a person with direct knowledge of the matter.
Tencent is likely to provide $1bn of the funding, with the round set to value the company at between $25bn and $30bn, the person said.
Local media reports cited by China Money Network state that venture capital group IDG Capital is in talks to lead the round while investment firm Tiger Fund is also in the frame as a participant.
Meituan-Dianping was formed in late 2015 by the merger of group buying platform Meituan and online local listings service Dianping, with the result being the formation of a company with a $15bn valuation.
The latest round would follow the $3.3bn raised by the company in January 2016, $1bn of which came from Tencent, at an $18bn post-money valuation.
DST Global, TrustBridge Partners, China International Capital, Canada Pension Plan Investment Board, Baillie Gifford, CDB Kai Yuan Capital Management, Temasek and Capital Today also contributed to the 2016 round.
The forthcoming round would support efforts to compete against other local services platforms, including Koubei and Ele.me, which are respectively operated and backed by e-commerce group Alibaba.
Meituan and Dianping had previously raised $2.6bn between them from Tencent, TrustBridge, Temasek, conglomerates Wanda and Fosun, smartphone maker Xiaomi, FountainVest Partners, Sequoia Capital, Qiming Venture Partners, Lightspeed Venture Partners, Hillhouse Capital, Fidelity Management and Research, General Atlantic, Northern Light Venture Capital and Walden International.
Alibaba was also an investor in Meituan, but sold its stake for $900m once the merger had been completed in order to avoid conflicts of interest with its own services.